Vice President Yemi Osinbajo in Abuja, said that over five million new tax payers have been enrolled in the last 12 months. Speaking at the 20th annual tax conference of the Chartered Institute of Taxation of Nigeria (CITN), Osinbajo said that the tax compliances is closely linked to good governance. He said that tax compliance should go hand in with good governance as the head and tail of the social contract between the government and its citizens.
He said “The government of President Buhari is working to change this state of affairs. We are determined to restore the full weight of the social contract. In reality, we shouldn’t have to debate this at all; tax compliance and good governance should exist side-by-side as the head and tail of the social contract that binds – or should bind – citizens and governments anywhere in the world.
“…the government of President Buhari is working to change this state of affairs. We are determined to restore the full weight of the social contract. We are rewriting the old rules and compacts; making it clear to Nigerians that we will ensure that every naira of public money is put to use for the maximum good of the Nigerian people, while simultaneously ensuring that every naira due to the public coffers in taxes is promptly and efficiently collected.
According to him “This level of commitment to accountability makes it easy to see how we have managed to, even in the face of dwindling oil earnings and a recession, succeeded in spending significantly more on infrastructure (roads, rail, power) and human capital development (education, health, poverty reduction) than previous governments. As of May 2017, only 14 million economically-active Nigerians paid taxes. I am pleased to note that that number is now in excess of 19 million, and still growing.
“We are rewriting the old rules and compacts; making it clear to Nigerians that we will ensure that every naira of public money is put to use for the maximum good of the Nigerian people. We will also simultaneously ensure that every naira due to the public coffers in taxes is promptly and efficiently collected. This level of commitment to accountability makes it easy to see how we have managed to, even in the face of dwindling oil earnings and a recession, succeeded in spending significantly more on infrastructure (roads, rail, power) and human capital development (education, health, poverty reduction) than previous governments.
“As of May 2017, only 14 million economically-active Nigerians paid taxes. I am pleased to note that that number is now in excess of 19 million, and still growing,” he said. Exemplifying with the wonderful achievements of Late Chief Obafemi Awolowo in South West, Osinbajo said that the giants stride which was achieved before Nigeria discovered oil proves how far tax payment can go. He said that the free education as well as infrastructural developments enjoyed in South western region of Nigeria were only possible with funds from cocoa and tax payment.
He however decried that with the coming of the military and the oil boom, everybody forgot about taxation as the central government began to give everybody allocations. “So, today the states in the old Western region, aside from Lagos, do not earn enough in taxes or anything else to pay salaries let alone do major capital projects. Without federal allocation, most states cannot survive. I am sure you are familiar with the statistics, Lagos state alone takes in as much IGR as 31 states combined. It tells you how little the other states manage to bring in IGR.
“This historical analogy of the old Western region and fate of the states that now constitute it explains the low level of tax compliance; the now-well-known fact that our tax-to-GDP ratio stands at only 6 percent. Although we are told that it will improve with VIADS and some of the steps taken already by the FIRS. This is obviously a dismal figure when compared to other countries at similar levels of development: Ghana, Egypt and India at 16 percent, South Africa at 29 percent. That our tax-to-GDP ratio is one of the lowest in the world should in fact surprise no one.
“As at December 2017, only 943 Nigerians pay self-assessed taxes of over N10 million and of that number 941 live in Lagos State, the other two live in Ogun State,” he said. He called on citizens to always endeavor to pay their taxes stressing that tax does not excite anybody anywhere in the World. He assured that the APC government will keep their part of the bargain by ensuring that monies realized from taxes were put to good use.
